The Indian National Space Promotion and Authorisation Centre (IN-SPACe) has proposed a comprehensive third-party insurance framework requiring launch operators to maintain insurance coverage of up to ₹500 crore for space activities. According to reports from The Hindu BusinessLine, this framework aims to address the high risks associated with space launches and operations while meeting India's international liability obligations. The policy framework, titled 'Policy Framework & Guidelines Addressing State Liability Towards Third Party Damage Arising Due to Indian Space Objects,' covers damage to people, property on the ground, and other space objects caused by space activities.
The proposed insurance framework covers launch vehicles and payloads, with the government also included as an insured entity. As reported by The Hindu BusinessLine, the insurance would generally be valid for one year, including the re-entry phase of spent rocket stages. However, IN-SPACe can prescribe a different period depending on the nature of the mission, such as sub-orbital launches or launches where the vehicle stage is used as a stabilized platform. Under the proposed framework, operators would bear liability for claims arising during the policy period, even if claims are made within a year after the policy expires.
The insurance requirement addresses significant gaps highlighted by recent failures. According to industry sources cited by The Hindu BusinessLine, most payload owners had no third-party insurance to cushion losses when ISRO's PSLV-C62 mission failed in January, leaving the EOS-N1 Earth observation satellite and 15 co-passenger payloads unable to reach orbit. The proposed ₹500 crore ceiling could help make insurance costs more predictable for emerging private operators, providing greater certainty while raising capital and planning missions by defining potential liability upfront.
The availability and pricing of space insurance remain challenging globally, with significant market volatility. According to Aon's Q1 2026 Space Insurance Market Report, premiums for risks attaching during 2025 exceeded $650 million, against about $503 million in claims. In 2023, premiums were around $550 million against claims of about $1.43 billion, highlighting the market's volatility. As noted by Madhankumar Chocklingam, founder of Orbix Global, the important dialogue now centers around how regulation, technical risk, and insurance capacity come together.
Director General IN-SPACe Lt General (Retd.) AK Bhatt told The Hindu BusinessLine that the third-party damage insurance framework will most probably be part of the Indian Space Activity Bill, which needs to be promulgated at the earliest. The framework is particularly significant as international space treaties place liability on the launching state even when activities are undertaken by private entities. The proposed framework ensures operators carry the financial cover needed to meet such liabilities, rather than leaving the government exposed to potential claims.
